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QC breaks logjam on trust reform

A £20,000 legal opinion on the future of Shetland Charitable Trust, one of the largest in Scotland, should finally see it reformed within the next 12 months, according to its chairman.

The £210 million trust has spent the past 14 months struggling to address the demands of Scottish charity regulator OSCR that it become more independent of Shetland Islands Council, whose elected members currently make up 21 of its 23 trustees.

In February 2010 a governance review group of trustees proposed just seven councillors join eight independents on a new 15 member charitable trust board.

Instead the existing trustees, led by SIC convener Sandy Cluness, voted to delay a decision until after the 2012 local authority elections, when he and many others intend to stand down from the council.

In response OSCR stepped up the pressure on the trust to reform. This led the council and the trust to jointly commission a senior legal counsel to advise how to resolve the regulator’s concerns.

On Thursday trustees spent two hours discussing a 49 page document drawn up by Edinburgh QC Roy Martin on the question of constitutional reform.

Mr Martin said he believed the trust’s constitution would have to change in order to comply with current charity law and practice.

His advice was that councillor/trustees should never be able to dominate Shetland Charitable Trust and therefore proposed having just four councillors sitting on a 15 strong board.

That way the trust would always require the support of at least one independent trustee before a decision could be made, even if there was the minimum of eight trustees at a meeting.

However Mr Martin said his advice was not “prescriptive” and there were a number of ways in which the trust could be reformed to meet OSCR’s demands.

For example, he said that if the trust wanted one councillor from each of Shetland’s seven wards, it could have an 18 member trust with a quorum of nine or 10 as long as a minimum number of independent trustees went along with a decision.

SCT chairman Bill Manson said that he hoped a new proposal for reform could be presented to the trust on 12 May, but he was not convinced that would be possible in such a short timescale.

There is still likely to be considerable debate about the size and make up of the trust, with trustees disagreeing about the level of councillor influence there should be.

Once a decision has been taken it will take OSCR around six months to administer and agree to the changes following a public consultation exercise.

Mr Manson said: “I can’t speak for every trustee, but the feeling I am getting is that this removes the logjam which was preventing progress towards change in Shetland Charitable Trust and it enables us to bring forward options for future consideration.

“The people who still harboured a belief that no change was required have had an authoritative opinion, which I think has persuaded most, if not all of them, to the view which some people already held in February 2010.”

He added that it would be “highly desirable” to have constitutional change agreed before the next council elections, so that the new intake of councillors would not be faced with the decision.